tv Fast Money CNBC July 12, 2012 5:00pm-6:00pm EDT
bell." thank you so much. i hope you'll follow me on twitter and facebook. stay with cnbc. "fast money" beginning right now. have a great night. earnings, the economy, investors, even the most seasoned ones, are worried. >> general economy of the united states has been more or less flat. so the growth has tempered down, but the residential housing, we're seeing a pick up. it's noticeable. it's from a very low base. it doesn't amount to a whole lot yet. but it's getting better. >> and don't even get us started on the fiscal cliff. >> i was just listening to the panel on cnbc. you know, he said he thinks we're going over the cliff. i.e., we're going to go to the end of the year without any comprehensive deal. that's really bad for the economy because people like me get very conservative. >> it's causing people to do all kinds of crazy things.
everything but trade. >> this is my last opportunity to say stud. >> putting it on the line and coming on afterwards to tell you all about it. fresh on the tradie ining floors is "fast money." live from the nasdaq markets out of new york city's times square, i'm melissa lee. stalks falling for the sixth straight session. health care utilities and staples holding on to gains. in fact, if you look at stocks close to 52-week highs, merck, wal-mart, target, cbs, clorox. joe, where did you go today? >> it continues to be the wal-mart market. if you look where treasury yields are, it's unable. why? when looking at nontaxable, fixed incomes. eventually what you have to see is equities, the flows of capital return to equities themselves. tonight we're going to get the
china gdp. we're going to talk later about what i think the outcome of the financials from jpmorgan will be. i'm surprised that the market is where it is given all the negative news we are greeted with every day. i think we should be lower. >> lower? >> i think we should be lower. i think the market has held in there incredibly well. >> i mean, we say six straight sessions of losses. really, the past couple days have been virtually unchanged. >> so levels have held up pretty well. i mean, 1325, a level that was resistance on the way up that we talked about for a while with support today on the way down. we had a nice bounce. close wasn't fantastic. here we are now between this 1325 and 1344 level. i think what people are hoping for, two things tomorrow, maybe get a surprise out of china and maybe jpmorgan/wells fargo gives you something to hang your hat on. i'm not nearly as optimistic, but i'll let the price be my
guide. it's not staying here tomorrow. there's no way we'll stay at these levels. i think lower, but don't be dogmatic. if we get above 1344, we should rally another 20 handles. >> where did you trade today, steve? >> today i bought a little c.a.t. i think the market is due for a bounce. as far as the china numbers tomorrow, here's how i think it plays out. we get a knee jerk reaction when we open, and then bulls will be bulls, bears will be bears. nobody east really going to believe the number. i don't believe the number. i think that the way i'm looking at the numbers, i'm looking at cummings. i'm looking at c.a.t. the reason i brought it up was because i think it's fully discounted, for now. i do think the market goes lower. i think there's too much complacency. you still have the market where it was up in the single digits this year so far. but yet the economic numbers have worsened significantly. so we should be lower. i think we go lower. >> yeah, it is the lower-end market that seemed to be working. the wal-marts and targets of the
world. yum brands and mcdonald's. starbucks had a great day. >> the yum brands and mcdonald's doesn't fit in the same way. much more u.s. focused. yum is more of a proxy for the china industry. i don't know. i feel fatigued as an investor. i mean, this tape is very difficult to really get any confidence because i do think there are more shoes to drop out there. it's hard to jump in. we did buy a bit of cummings yesterday, we talked about. other than that, i really didn't do a whole lot today. just weight for jamie. >> right. that's tomorrow. >> let me just go back. you asked me, what did i do today? i added to mcdonald's. the expectations being maybe what was feared with mcdonald's for june's sales will not be as bad as anticipated. the price action now allows you to raise your stop, your point of reference here, your risk.
i think that's important. secondarily, i also think you have to understand. look at what nike told us. look at what seagate told us. a lot of these companies are telling us an absolutely horrible story. that day the stock trades down, but it recovers over the next four, five, six trading session when is most folks are not paying attention to it anymore. it's interesting we talk about buying cummings. has it potentially bottomed? we have to trade not the one or two-day reaction to these stories, but what happens a week later. >> let's talk about a big gainer in today's session. that's proctor and gamble. william ackman telling cnbc here that it is the largest initial investment he's ever made and the stock is very undervalued. obviously, this is a huge market cap company. so no matter how big his investment can be, it is much smaller than what an activist would traditionally need in order to actually enact change. >> right. i mean, a 5% position here,
which would be enormous, would be, what, $8.5 billion, maybe a little lower because of its run up today. it doesn't look strikingly cheap, to me, here. i don't know. this one's kind of a head scratcher to me. hard to -- >> but if you look at it in terms of being -- it is -- you know, it's 16 times. foreigners say, that's expensive. you look at a name we talk about all the time in church and dwight, which is trading around 22, 23 times forward earnings. in terms of stock price, made another, not 52-week high, but all-time high today. on paper, pg is much better. better dividend. i think 3.6%. obviously cheap evaluation-wise. i still think as crazy as it might sound, the beta trade is chd. >> just one more thing. the multiple here over the last five years has not traded wildly off from here. i don't love the idea of, you
know, if it's a new multiple. >> right. >> that's a much harder sale. >> i would just say, don't go near if if because of that reason. there's no way he's going to influence them. i couldn't influence clorox. bill's not going to influence them. it's worded very, very carefully. it's his biggest investment. i don't know what he runs. maybe it's $8 billion. that's a 1.5% position if he's irresponsible with the waiting of that position. >> all right. let's bring in our next guest. she thinks ackman could be angling. linda, great to have you with us. >> hi, how are you? >> good. if it the ceo is in fact ousted, how much would that add to the stock at this point? >> well, you know, i mean, we've already had quite a bit of wall street dissatisfaction with bob mcdonald. you know, i think there would be a question mark in terms of if he were ousted what that would
mean because certainly there would be disruption, operational disruption. for that matter, proctor & gamble does not have a history of hiring outside ceos at all. they promote insiders. there's no obvious replacement for bob mcdonald. so, in fact, it's possible -- and ackman has a reputation for this. indeed, this may not happen. it may not necessarily be good. >> we established bill ackman, it wouldn't be enough to gain this sort of prominence and import needed to enact change. how is the board of proctor & gamble? have they had a history of working with large investors in the past and being open to listening? >> well, you know, certainly the ceo prior to bob mcdonald was
there for a long time, around ten years. he had a very successful run. prior to him, dirk yeager was only ceo for 18 months. that shows that the board can act quite quickly to make decisions if a ceo is not perform. of course, bob mcdonald has been there for a few years now. >> linda, hopefully you can answer this question. when ackman says he thinks the stock is undervalued -- undervalued compared to what? in your opinion, is he right? if he's right, what should the multiple be? >> well, no, i don't think that proctor is undervalued. i have a three average rating on the stock. i have actually a $62 price target. proctor is trading at, you know, a modest discount to colgate. both colgate and proctor & gamble are relatively expensive stocks compared to others in the market. >> all right. linda, we're going to leave it there. thanks for your time. >> i've got an idea for the ceo.
ron johnson. he's going to need a new job soon. >> i was going to say, ackman doesn't have the best recent track record. >> isn't the end game here, though, for ackman to try and break up the company as he did with fortune brands, as he tried to do with target? isn't that where the real value would be unlocked? isn't that the reason to follow him in? if you don't think he's going to be able to break it up, why be there? >> i don't know if that's the strategy. i don't know. >> we have no -- i mean, it could be all of the above. mike, i'm curious what you think the trade is here. >> p & g, i start of look at those kind of stocks almost like an inflation adjusted bond. i don't know that comparing them with everything else in the market place is necessarily appropriate. i will say that because proctor & gamble's volatility is low, people have been making
speculative, foolish bets by buying calls. the october 65s are about 2% of the stock price at about $1.250. this is one of the ways i think people are saying, okay, we're not sure what he's up to. maybe we go along for the ride, but we're not going to risk a lot to do. >> all right. let's turn to what could make or break your portfolio tomorrow. that's jpmorgan and wells fargo reporting. take a listen. >> i truly believe that the earnings results from jpmorgan and wells fargo will be a catalyst. pnc came down, filled the price gap at end of the month from june 28th, 29th. that's your trade. that's what you want to be long going into financial earnings. i'm adding to my longs aggressively today. >> i'm curious, joe. in terms of base case scenario for being a catalyst for the markets, what would that be? what about the loss in london? >> i think he has to, in essence, tell those on the conference call that he is very comfortable that the loss has
not only been mitigated but there is no further potential losses going forward. i think he also has to talk about what he's going to do with the share buy back. again, i still think the trade off of all this, and give me jpmorgan on a pull back because i'll buy it, but you look at the regionals as your way to play that. guys have talked about usb. i've added to pnc and texas capital. the reason you're playing these regionals is being the expectation is second quarter mortgages are going to be better. you're going to see in some cases 5 to 6% quarter on quarter growth. it's all on the back of the heart program, which many expect really has accelerated here in the second quarter. >> all right. let's bring in charlie, who's invested in financials, including a major holding in jpmorgan. charlie, great to have you with us 37. >> thanks for having me. >> have you added to your position at all since the last time we talked? i think it was before jamie dimon testified.
>> yeah, the short answer is no. the reason is that jamie is the best banker in the space. jpmorgan has become the leading it's just not as cheap as a number of other financials. it's trading for about book value. that's cheap on a historic basis but not nearly as cheap as some other names we like more like goldman sachs and morgan stanley. >> it's karen. goldman sachs and morgan stanley are a little different animals. obviouslere' overlap. would you rather have that exposure, you know, for trading and investment banking and m&a? >> i would say people in general think there's more difference between jpmorgan and goldman sachs and morgan stanley than there actually is. morgan stanley, 40% of their business comes from wealth management. huge fixed income management at both places.
jpmorgan is perceived to be a bank. it's really an investment bank. it has commercial banking operations, but where they make their money is not that different from goldman sachs and morgan stanley. >> jpmorgan jumped the gun on the bank stress test a while back. the conspiracy theorist in he says with all the bad news they've had, says they're going to have one humdinger of a quarter on the upside and this stock spikes by 5.5%. is that feasible? could you see that happening? >> you know, it's possible, but i think that people are going to be so unbelieving in what they report tomorrow. if they have a great quarter, people are going to think jamie released litigation reserves. they're going to think he sold positions, long-term gains to take a one-time gain. i think people are going to be pretty incredulous about tomorrow's numbers. that's why i think it will be hard for the stock to do spectacular. >> won't we know?
we'll know it when the quarter is reported. it's not going to be a mystery. >> no, you actually don't see the release of things like litigation reserves. a lot goes on. you don't know what securities he's sold to produce the gains. a bank like this has a lot of discretion about when they take gains, what they did in the quarter. that's part of the problem in analyzing banks. the quarterly numbers are hard to analyze. >> all right, charlie. we're going to leave it there. where are you setting up, steven? >> i think kkr is kind of interesting. the private equity firms has not been great investments, but you talk about the ability to move into europe and take advantage of distressed selling. kkr is perfectly set up for that and gives you nice yields. >> next, "fast" is going running with the bums. one expert sees plenty of silver linings when it comes to the people's republic. find out next. tdd# 1-800-345-2550 i'm constantly working my screens.
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welcome back to "fast money." we're live at the nasdaq market site in new york city. caterpillar down. take a listen to what steve had had to say about shorting the stock. >> so i started shorting c.a.t. yesterday. shorted some more today. their forecasts are at 3% u.s. gdp. eu being flap, all of europe being up 50 bits. brazil, 4%. i believe every single one of those tharargets is going to be missed. >> what did it you do with this? >> i was short. i covered a little too soon. i bought today. in case there's a great china number, this will participate more than any others. if it's a bad china number, my downside is somewhat limited. a small position.
they have missed on every one of those targets. i believe that was in may i made that call. >> guy? >> if you believe in global growth, caterpillar has been telling you a completely different story since january, february when we started talking about getting out of the name. although i understand what he's looking at, the stock evaluation-wise is ridiculously cheap. it's traded awfully now for the last five or six months. i get the china numbers can really bode well for the stock in the short term, but i think c.a.t. goes lower. >> i think you first have to see some form of m & a interest. look how cheap this entire space is. i was talking about joy global potentially being a take out target when the stock was trading 85. you have a p.e. of around $51. let's hear some interest in potentially a takeover target in the space. i do believe at some point in the second half it's cheap enough you'll hear something like that. >> day six of this year's running of the bulls in spain.
we have our own bull run going on too. we're turning our sights on china ahead of its gdp number. growth slowed in the first quarter. our next guest says there are signs of investment spending. joining us now is jean ulrich. it's always great to have you with us. >> thanks very much. >> in terms of data to support that thesis, what are you seeing? >> in the second quarter, i think gdp growth probably was around 7.5 to 7.7. we'll get today that released tomorrow. in the recent days, we're getting a slew of economic data from china. some are not so good. some are actually okay. for example, inflation is down. that means in the coming few months, we have the monetary easing from the central government. however, some other numbers are weaker, for example, capital spending, retail sales have come below expectations. so the data basically are mixed
so far. >> a question on the property. so they put property controls in there now. the property bubble is really leaking quite a bit. but now i'm hearing that they're sort of relaxing them because they've gotten so worried about the decline in property prices. what are you hearing in regard to that? >> well, the property market is of central importance to the chinese economy. it accounts for about 10% of gdp. the central government hasn't yet relaxed monetary policy towards a sector. however, we're seeing local governments relaxing policy. for example, we're seeing transaction volumes in the key cities actually rebounding in the recent weeks. however, they've come down from a very high level several years ago. so compared to the all-time peak, property transaction volumes are down about 40 to 50%. but compared to january and february, they're actually improving. so overall, in the second half of 2012, we're expecting some recovery in the properties sector.
i don't think they're going back to the all-time high. >> payroll growth in china seems to be doing well. does that insulate the chooi naez consumer from a downturn? >> the chinese consumer is still spending. retail sales growth, so far this year, has been at around 14%. so compared to other large economies, chinese retail sales have been relatively healthy. however, compared to china's own history, retail sales growth in the last five years was actually around 18%. so there is a substantial slow down. we're seeing chinese consumers becoming more conservative. sentiment is not as strong as before. so throughout 2012 we're expecting consumer spending compared to previous years to be relatively lackluster. however, it is still stronger compared to the heavy industries. >> if you look back to 2009, i would argue that it was the chinese stimulus that actually was the catalyst to get the market basically off the bottom.
do you believe there's a willingness there to do a mini stimulus plan, or do you think this transition to power coming in 2013 basically places that on hold? >> i think this cycle is very different from 2008-20209. in 2009, china was the savior. after launching a stimulus program, the country's economy experienced a v-shape rebound, basically improving the outlook for the global economy. this time, the central government is actually very, very conservative. they're acting in a much more nuance fashion. we don't think there will be a large scale stimulus program. however, we're expecting some tax reduction for individuals and for companies. we're expecting more monetary stimulus. however, this won't amount to the large stimulus package that we saw back in 2009. >> all right. thank you for your time.
we appreciate it. >> thanks very much. >> all right. in terms of data points we are getting from u.s. companies or from european companies exposed to china sales, burberry, cartier, nike. the list goes on. we're trading as if if there's going to be a sharper than expected slow down. >> i think the credit bubble in china is going to make our credit bubble look like a walk in the part. they have debt on top of debt on top of debt from local governments. 40% of their revenues have come from property sales. it's a disaster. stay away. >> all right. next, we're taking an inside look at what's driving some of america's cities to the brink of bankruptcy. stay tuned to find out if your town could be the next to go broke. later on, one of our very own traders is prescribing a trade of the day that you won't want to miss. it could be the key to finding some healthy gains. so you want to stick around and find out what's behind the curtain. more "fast" after this.
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if we don't get these politicians to come together and we face the most predictable economic crisis in it history, i think it's absolutely clear that the fiscal path we're on is not sustainable. for me, the best analogy is these deficits are like a cancer. over time they will destroy the country from within. >> co-chair of the president's deficit commission discussing the country's financial problems earlier today on "squawk box." this interview got your goat. >> it really did. i thought it was an interesting interview. i hadn't seen them do their dog and pony show before. i don't know if they ever do it, but it was fascinating to me. it really is frustrating, you know. they've already done all the hard work of pissing off both sides.
you would hope there would be some leadership in our -- i mean, that's a ridiculous hope, but you would hope there would be some leadership so we could get something like this done. it's not as if we can ignore it and it will go away. it will only get worse. so it's very, very frustrating. and it just puts a chill over -- i mean, you saw the malone clip later where someone like him says it's hard -- >> here's that and the concern. >> well, if malone gets concerned, you can see how leaders -- business leaders are concerned about what's going to happen. think of what happened the last time we ran into this issue. it was a disaster for the u.s. stock market. >> sure. of course, fiscal problems deepen across the country. san bern dee know is the third city in california to take the bankruptcy route no two weeks. jane wells is there looking into what, if any, these announcements are having on the muni market. >> reporter: how gloomy is it? it's starting to rain.
everyone is asking who's next. officials saying the city of los angeles is going to be fine. the city council is saying it's now getting a legal opinion to see if it can skip state mandate the mediation and go to chapter 9 because it has no money. how does a city like this only have $250,000 in cash? the city attorney claims someone's been cooking the books for a long time. the controller's office says they haven't launched any probe yet. meantime, confused locals are trying to find out what it means to them in terms of public safety. the police chief praised his force for hanging in there. >> what does it mean to our officers and employees? it has a tremendous amount of anxiety and things attached to it for them. it affects their benefits, salaries, retirement. those are all very good, real concerns. >> reporter: okay. we've spent the afternoon trying to figure out what this means
for the muni market. a market analyst says they have a total of maybe $72 in debt. that's minuscule in the $3.7 million muni market. he says these bankruptcies of cities are spurring inves to bes to invest in state bonds, which are seen as safer. how does california stack up? thompson has a benchmark. the day before stockton filed, california g.o. bonds were 83 basis points higher than the benchmark. the day after, the day stockton filed and the day after, that spread didn't change at all. in fact, as of today with two more cities seeking protection, the spread is actually tightened to 78 points. there's currently much more demand than supply in these bonds. finally, one piece of good news for some people here. wells fargo is paying the justice department $175 million for allegedly overcharging minorities who were seeking
mortgages. the justice department says 1300 people in the inland here may be eligible for $3 million of that money. believe me, i bet they'll line up to take it. >> i'm sure. thank you so much for that. with more cities going broke, is a crisis on the horizon? joinings now is the president and ceo of laventhal company. people hear about this and get worried. the muni market is saying nothing to worry about at this point. >> it is. they're looking at each of these cities as specific issues. not to say there may be other issues in some of the other 350 or so cities in california. bear in mind, these are only three. the market's been strong. defaults are the lowest they've been in three years. >> so let me ask you then from a secular standpoint, many investors have said, okay, municipal bonds right now are
attractive because the fundamentals aren't as bad as suggested the last few months. however, the chase for yield is one of the reasons. on the other side, the shoe is going to drop because with the housing recovery that's absent, you can't get any increased tax revenues. >> here's what i would do. first of all, let me say i think there are 30 states showing revenues above projections. california, by the way, just passed a balanced budget. what i would say to an individual investor is invest in a mutual fund, an exchange traded fund, or if you have above $250,000, invest in a separately managed account where you have a professional manager who's looking over everything. if you're an investor in california, even though you have a high tax, maybe you want to look at investing out of the state and having a national fund where you really are diversifying. >> what are you seeing in terms of flow of funds, either into or away from your space right now? >> actually, $143 billion has
gone into mutual funds in the year to date. that's very, very different than what we saw a few years ago. obviously, people are chasing yield. ironically for the second year in a row, mumunis are the best performing asset class. that is something that's certainly driving things. the other thing to consider, remember just this week president obama came out with the plan for extending the bush tax cuts but only for those who make $250,000 or below, which would mean that taxes would rise for those above $250,000, which means that municipals actually are more valuable to them. >> all right. alexandra, thank you for coming by. we appreciate it. so looking for a way to play rising food prices? then you're in luck because the children of the corn trade isn't over yet. we're giving you more of the best plays right after this. sometimes investing opportunities are hard to spot. you have to dig a little. fidelity's etf market tracker shows you the big picture
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increased stake in the trucking company. mike, you've seen interesting activity in the options. >> basically, we've been seeing interesting activity for about six weeks now. obviously there was some talk about icon's involvement a couple weeks ago. of course, there's a lot of concern about navistar and what they're going to be about these noncompliant engine problems they're having. we've seen the prices for options go from about two times what it costs to buy options in the s&p to over four times. the open interest has really spiked. we're talking about a six-fold increase in the open interest in just about six weeks. about a five-fold increase in calls as people are sitting here babbling about whether or not they think the company is going to make it through the troubles on the engine side or whether carl icon and other activists have really got something going here and the stock could spike. >> it's an interesting push-pull dynamic. it's not just icon today raising its stake. franklin resources increased its stake, although it's a passive
investor. so you got to wonder what is going on? they've got these massive engine issues. >> i know. i mean, from -- on the one hand, there's prerisk. it's very interesting. you have two very large shareholders, each under 15, because there's a poison pill at 15 which means you cannot buy over that amount of you have to make a high bid for the company. no one would ever do that. that's not mark. that is not him. anyway, there are -- and they can't be a group. so we don't know if their interests are at odds, necessarily. let's assume they both want the same thing, which i think they probably do. >> are they on amicable terms? it's another interesting angle. >> then there was the bitter feud between them on the lions gate. i don't know if this is friendly or not, but they seem to have similar interests. there was an activist in here
before, al creek. they had a large stake, couldn't get anything done. they didn't like what they were seeing. they ended up exiting. it sets up great, except the business seems to stink right now. that makes me afraid. >> and it's changed dramatically since they put their money in. number one, their significantly under water. they go in there, get new management, and lead them through the certifications with the epa on their own engine. now they come out and said, okay, we're junking that. we're going with a new engine, new clean engine. they haven't even identified the components, if it can work. it's a complete mess. i think they're just stuck in it and it's going to take a long time to play out. i don't see an obvious buyer. >> let's move on. barclays and goldman sachs increasing as corn rallies. concerns with draughts across the midwest. corn prices are up more than 4% today alone. joining us now with the children
of the corn trade is jim bauer, president of bauer trading. jim, great to have you with us. you think soybean could be the next big grain to benefit from this? >> as your program says, follow the fast money. i think the media and trade has done a good job with this corn market. it's been fast and furious for several weeks now. when you step back and look at the usda numbers from yesterday's report, you look at the weather forecast looking out ahead, namely this threat now that we're starting to see in the western and west-central corn and soybean belt. i think some attention from an analytical standpoint and a trader standpoint really needs to follow this soybean market. we're down to about a 4.2% ratio. that's without any further weather problems in the midwest. >> hey, jim. it's joe. back in 2008 oil prices went to $147 as there was this transition from pit trading to electronic trading. you have a similar dynamic happening now on the board of trade where the pit traders no
longer control sentiment at the end of june. do you think that's contributing? do you think that places the grain futures market in even more concerning position? >> well, as an owner of a brokerage firm and someone who's been in this market many, many years, i think the big change that i see is the fact that the market essentially is around the clock, around the world. the settlement price is a harder thing to discover. but certainly from a volume standpoint and a market interest standpoint, we've seen tremendous interest come from us from many different sources on this grain complex. so again, i can't tell you what the weather is going to be the last two weeks of july, first three weeks of august. i can tell you if this weather stays inflammatory and we keep dropping this yield down on soybeans, we could be faced with a protein shortage worldwide in the months to come. >> the grains have acted well, the ones you're talking about. how much of draught weather, draught conditions going forward to the time period you mentioned
is already discounted in the prices? >> that's a very good point, but i think you have to remember as a trade aer in this type of market structure, weather is by far the key price determinant. you don't want to look too close at the price. you step back on a daily basis. i'm going to make it simple. if the crop is getting bigger, sell. if it's the same, sit. if it's getting smaller, keep buying. remember what happened with wheat in 2007. we can get a market that has to have demand destruction and have to go to levels high enough -- >> even if it rains tomorrow and rains a lot, it won't necessarily save the crop or make it bigger, will it? is there still that window of time where the crop can be rescued and can actually get bigger? >> the corn crop is -- whatever has happened as far as irreversible damage on corn, that's already on place and the market knows. that's what i've tried to tell you on this program. the critical time for soybeans is the last two weeks of july, first three weeks of august in
the northern hemisphere. if we hilt the conditions we saw in june and first two weeks of july in corn, if that hits soybeans, i don't know where the price would go. we'd have to go to demand destruction. it will get very, very wild. >> jim, great to speak with you. >> thank you. >> protein shortage around the world. >> how do you trade it? it's not been performing along with the futures themselves. i think that's telling you something. the trade there has passed. you have to worry about the ethanol supply. that takes you to potentially gasoline spiking higher. look at the performance of the refiners so far month to date. wnr and cvi. >> all right. most powerful players in media are assemble in sun valley, idaho. we've managed to get the scoop on some secret rendezvouses. stick around for that story after this. [ male announcer ] the markets keep moving. make sure the news keeps coming with thinkorswim by td ameritrade.
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sometimes, we go for a ride in the park. maybe do a little sightseeing. or, get some fresh air. but this summer, we used our thank youpoints to just hang out with a few friends in london. [ male announcer ] the citi thankyou visa card. redeem the points you've earned to travel with no restrictions. rewarding you, every step of the way. coming up next hour on "mad money" is it time to flip the switch on a utility that's wrapped up in controversy? cramer decides. plus, he's talking to the chairman of american realty capital. all coming up at top of the
hour. the annual sun valley media and technology conference is underway in sun valley, idaho. we have which big wigs are breaking bread this year. >> reporter: melissa, those are the most interesting tea leaves to look at because we know in the 30 years this conference has existed, it's really about the relationships that are forged here and what deals do end up materializing from them. lest look at apple's ceo tim cook. he's a first timer this year. steve jobs had always been a no-show. he was strolling about last night with twitter's founder. he's now the founder of square. there are all these rumors from bankers about possibly apple buyibuy ing twitter. that pair right there is definitely not discounting those rumors any time soon. netflix, reed hastings was out with bob iger from disney last night and was entering the meeting with direct tv's mike white.
finally, let's look at buffett and bill gates. wouldn't be sun valley if you didn't have these two best friends paling about. they're both vets of this conference and have a lot in common. finally, the frenemies. mark zuckerberg entering and leaving a panel this afternoon. obviously a lot to talk about. rumors that zuckerberg was at google's headquarters in the meat packing district. maybe there's something going on here. we don't really know. the big question is, where's larry page? that's something we're going to ask the chairman of google. we have a sit down with him in just about an hour. we'll bring you that interview first thing tomorrow. melissa. >> which power couple seems like an odd couple to you, kayla? >> reporter: oh, i think that the tim cook and jack dorsey couple is bizarre. dorsey was leading a panel on innovation. i'm sure he was getting ideas. tim cook is significantly older.
apple and twitter, you don't think of as coordinated companies. it's something you have to think about. a lot of bankers are talking about it. >> all right, kayla. thanks so much for that. you notice the temperature swings there. in the morning it was cold. all three had blankies on. >> but that was, like, it was dark out though. >> yes, must be very chilly. >> i'm curious who you were out to dinner with last night since we got all that information. who everyone else was out to dinner with. >> i was at home eating by myself. >> there you go. >> oh, never mind. >> why does warren buffett have to wear a name tag? >> because they're ordinary guys. you don't want to presume everyone knows you. >> excellent point by you. >> i try. if you have the blues after another down day on the street,
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it's managed care. here's what i like about it. number one, very cheap. cheaper than the others. they did a transformational acquisition getting much more into the medicare/medicaid market, which can be a $3 billion market. i think with obama care out of the way, the only upside to come, it's a great stock to own. >> mike, would you go to well point, or would you go to some of the medicaid insurers, which are believed to be the next targets to be taken over? >> a lot of these names were trading at very cheap evaluations going into the supreme court decision. the name we like best is probably united health. i think i'd probably rather belong to united care than well point. the options market does seem to agree with steve on this one. we've seen a four-fold increase in bullish bets on the call side, about 200,000 open interests. i guess they're going with his subscription here. >> wow, mike.
>> trade some tweets here. trader michigan tweets, is the market going straight down in july just as it did in may sm. >> past performance is no indication. isn't that the line? >> no guarantee. >> look, you know i think you pretty much know where i stand. i think the market is in for a tumultuous couple months. down day on tuesday. that was not good. if you get some positive china data, don't be dogmatic in your views. if we get above 1344, you have another 20, 25 handles on the upside. you put a gun to my head, i think we're down lower. >> all right. your first look at form when we come back. stay tuned. [ male announcer ] at scottrade, you won't just find us online, you'll also find us in person, with dedicated support teams
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time for the final trade. mike. >> bad gambling revenues in las vegas and lowering forecasts. i'd buy put spreads here. >> weiss. >> i'd make such an eloquent case. i'm staying with well point. >> happy anniversary to mick and the boys. this is a trade. super value down 50% on eight, anytime, ten times normal value. >> karen? >> i got to take the other side. >> oh! >> where do you hope it goes?